Fitness Track May Work Out for Stumbling Sears

It's common knowledge that Sears is a huge seller of dishwashers and power tools. But did you know it's also the No. 1 seller of fitness equipment?

"It's a surprise to some people," admitted Julia Fitzgerald, chief digital engagement officer for toys and sporting goods at Sears Holdings, noting that the retailer began getting data showing its leadership in the category during the first quarter of 2011.

"We didn't get here by accident. It's always been a category where we have great relationships with our vendor base," Ms. Fitzgerald said. And now Sears is taking those relationships and building them out with editorial content around fitness to create a bond with consumers. "We said, 'Wow, let's not just sell great equipment, let's have great content as well,'" said Ms. Fitzgerald. "When you buy a piece of equipment, you're really coming in for a healthier lifestyle or to lose that last 15 pounds."

It's a strategy that could be employed in other areas and may offer a clue as to how the much-maligned retailer intends to turn itself around.

"It's all part of our integrated approach to retail where content should support retail and retail should be supporting content," said Ms. Fitzgerald. Other examples of areas where the company is working to produce quality content and cultivate an audience include the Craftsman Club, which has more than 1 million members, and Kmart's Playdate Place, she said. Both offer exclusive newsletters, curated content and perks for members.

The approach -- identifying and investing in a distinct category and cultivating an authoritative voice via editorial -- is "absolutely" indicative of what consumers will likely see from Sears moving forward, said Paul Swinand, an analyst with Morningstar who covers retail and fitness companies.

One of Sears' Fitness Flagship shops

"It's actually a smart strategy. The value-add in a lot of retail transactions is advice, community, information," Mr. Swinand said. "You have to do something your competitor can't."

Sears counts 38 so-called Fitness Flagships. The 6,000-square-foot shop-in-shops feature hardwood floors and large mirrors. And the lead sales associate in many locations is also a certified personal trainer.

Ms. Fitzgerald said Sears is still determining the areas and populations that are most receptive to the concept, as well as the ideal footprint. Each flagship is slightly different in size and layout, she said. They're scattered across a dozen states in cities including Phoenix; San Diego; Troy, Mich.; Wayne, N.J.; and Appleton, Wis. "Early results say it's a really good idea and that we should plan on finding new locations," Ms. Fitzgerald said, declining to comment on any specific expansion plans.

Online, Sears has launched the complementary FitStudio, developed in part by Modernista before the agency closed last year. FitStudio is now primarily handled by an internal team. FitStudio uses an advisory board of fitness experts and a number of bloggers to deliver content on trends, workouts and nutrition. E-training memberships, starting at $9.99 a week, can be purchased, as can various fitness products.

But the emphasis isn't on selling, Ms. Fitzgerald said. "We want to keep the overt selling minimal and the content and support at the forefront."

Marketing for the Fitness Flagships and FitStudio is primarily handled in-house and includes in-store programs, print, social media, PR and digital, including Facebook ads.

"[Fitness] is a category that 's strong right now and is going to get stronger," Mr. Swinand said. "Correctly identifying it as maybe an underserved category and a category, like tools and appliances, that might require some physical presence, some great customer interaction … I'm startled that Sears seems to have figured it out. … How could they be so good online, when it looks like they're bumbling their stores?"

Sears has taken knocks in the press lately for not investing in stores; weak holiday sales led to the news of store closures at Sears and sibling Kmart. And last week, lender CIT Group said it would stop financing loans to companies selling to Sears amid concerns about the retailers ability to pay.

Gary Balter, an analyst with Credit Suisse, said that not investing enough in stores could undermine Sears. "Besides William Sonoma, we view Sears as the most forward thinking among hard-line retailers on the opportunities of e-commerce and of the potential to use multiple touch points with consumers to its advantage," he wrote in a recent report. "It is a shame that the company has seemed resolute in underinvesting in its core stores, as, in our opinion, the poor consumer experience at the stores takes away from this approach."

Ms. Fitzgerald argues that Sears Holdings' efforts to invest in stores, categories and geographies that are performing are often glossed over as people choose to focus on negative news. "We're really taking a hard look at how we can be the sustained leaders in [the fitness] category both online and in-store, with those elements really connected," she said.

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Natalie Zmuda

Natalie Zmuda oversees the CMO Strategy section and is responsible for identifying and analyzing the latest trends impacting chief marketers. Natalie also covers the retail and non-alcoholic beverage categories. She joined Advertising Age in 2008, following five years covering the retail and fashion industries for Conde Nast Publications.